Feedlot Ponzi Scheme Sends South Dakota Man To Prison
A Corsica, SD, feedlot operator who pleaded guilty to operating a Ponzi cattle scheme was sentenced to nearly eight years in federal prison on Thursday.
Robert Blom entered a guilty plea in August to what prosecutors said was a scheme to resell the same cattle to multiple investors, making a profit of about $24 million from 2014 to 2019. A federal indictment in March 2020 detailed about $10 million in funds related to his feedlot business. Prosecutors said he altered purchasing documents leading investors to believe his feedlot was more successful than it actually was. He sold the same groups of cattle to multiple buyers and used the money to pay back previous investors.
A civil foreclosure case against Blom remains ongoing, with more than 70 parties listed claiming that Blom owes them money. First Dakota National Bank claims Blom owes the bank more than $6 million.
Blom received a sentence of 97 months – with six month subtracted for time served – on charges of wire fraud and money laundering. As part of a plea bargain, 30 other charges were dropped.
Judge Karen Schreier told Blom he should have known what he was doing was wrong, after facing charges in 1997 for getting a bank loan after lying about cattle he didn’t own. He received probation at the time.
Mike VandenHoek lost $380,000 in the fraud scheme and told KELO-TV that Blom’s apology in court was meaningless.
Blom asked the judge for mercy. His defense attorney painted a picture of a stressed-out farmer who was only trying to save his family farm. The judge ordered Blom to start paying 5-hundred dollar monthly restitution payments after he gets out of prison.
